The digital world is providing more and better opportunities for women to invest
The past two years have proven tumultuous for the technology industry, with sexual harassment, gender pay gaps, and underrepresentation of women dominating headlines. “We are on the verge of a true movement,” believes Kate Brodock, CEO of Women 2.0, a global media and tech brand focused on diversity and gender equality. History suggests that a major movement needs both fight and a flock - a community in public solidarity with those championing a cause. The past decade saw tremendous awareness and community building efforts, says Brodock. The flock was ready. But it’s only now that the fight has begun. A straw in the wind came in November 2018; 20,000 Google employees orchestrated a global walkout, protesting the exit of the creator of Android, for at least one proven sexual harassment claim.
It’s a shift from 2015, when Ellen Pao lost her $16 million gender discrimination lawsuit against the venture capital firm Kleiner Perkins Caufield & Byers. Today she is widely seen as laying the groundwork for starting the conversation on systemic bias in Silicon Valley. “Pao’s loss seeded the argument that would later ignite a movement,” says Kathryn Ullrich, a Partner at Odgers Berndtson’s San Francisco office adding: “The voice of women in tech reiterates the age old messages previously falling on deaf ears that women are not getting the opportunities and are not getting paid equally. And that voice isn’t stopping, it’s only getting louder.” While awareness-building by women in tech is at an all-time high, the numbers still have a long way to go. Of 239 billion-dollar venture-backed companies worldwide, only 23 have a female founder.
Last year boasted of only one women-led tech IPO: Stitch Fix led by Katrina Lake. Perhaps the most notable result of these efforts is the growth of a new class of investing: women investing in women. According to Crunchbase, which records data on the world’s most innovative companies, in Q3 2018 $6.4bn went into startups having at least one female founder. But that’s just 14 per cent of all global venture funding. The incredibly low amount of capital making its way to female founders seems odd, given numerous reports on the commercial success of female-founded businesses. In 2015, First Round Capital – which backed Uber, Warby Parker, and Birchbox - published a report demonstrating a correlation between performance and the presence of at least one female founder, with these investments outperforming investments in all-male teams by 63 per cent.
"The voice of women in tech reiterates the age old messages previously falling on deaf ears that women are not getting the opportunities and are not getting paid equally.
And that voice isn’t stopping, it’s only getting louder."
In the past few years, more women started taking things into their own hands by launching their own funds, some specifically investing with a gender lens such as Trish Costello’s Portfolia, Pocket Sun and Elizabeth Galbut’s pan-US/Asiabased SoGal Ventures and Anuradha Duggal and Sutian Dong’s Female Founders Fund. In tandem, femtech has emerged as a disruptive tech class of its own, as more female founders embrace technology and choose to address problems that matter to them. “When I became a mother, I saw so many areas of post-natal health that could be positively impacted by technology.
I was so angry that 70 per cent of new mothers and one in three women had preventable pelvic floor problems that could be addressed through exercise,” says Tania Boler, Co-founder of Elvie, a British female-focused healthtech startup whose debut product - a pelvic floor training device - aims to shatter the taboo around women’s health.
“Women may be under-represented in tech but as more women are starting to make a name for themselves within the industry, digital female health is one of the fastest growing sectors,” says Ida Tin, CEO and Founder of female health app Clue. In fact, between 2015 and 2018 femtech has received more than $1bn in funding and is set to be the next big disruptor in the global healthcare market, according to a study by Frost & Sullivan.
But while women may be altering some aspects of the technology and VC landscape, it hasn’t yet translated into more money for female founders. “We’re still at Version 1.0,” says Ullrich. “Unfortunately women-led or female-focused startups tend to be under capitalised, which inhibits growth. Other companies swoop in, often male-led and typically better-funded, pick up their great ideas and take over the market,” adds Trish Costello, CEO of Portfolia, an entrepreneurial investing platform designed for women.
Increasing the number of female General Partners at VCs, boosting the numbers of qualified female investors and creating more for women to invest in what counts for them are needed, believes Costello. Portfolia, which aims to go global by the end of 2019 says it’s one of the few venture investing processes designed for women. In November 2018 Portfolia successfully closed its FemTech Fund, the first venture fund in the US focused solely on women’s health.
“Companies hiring women and embracing a gender diverse workforce is equally vital,” says Lauren Shearer, an Associate in the Technology and IT Services Practice at Odgers Berndtson in London, adding: “It’s a tacit understanding, especially on the part of larger and more established organisations, that gender diversity in their leadership is a must.”
Ali Palmer, a Partner and Head of Consumer & Telecoms at Odgers Interim, concurs. “Clients emphasise their need for a diverse shortlist, some will only accept a 50/50 gender diverse shortlist.” Inclusivity is an equally important factor. Brodock says that while most tech companies monetarily support the women-in-tech movement, primarily by sponsoring women’s-oriented initiatives, “it simply wasn’t enough to enable a truly inclusive workplace. It isn’t enough to give your hiring manager a mandate or a target percentage for hiring women into a tech role, and then step off of the pedal. A company’s leadership needs to equally ensure that these new female recruits will be supported, recognised and championed within their organisations.